Syrah Resources Ltd. said Sept. 4 that it seeks to raise A$94 million from a fully underwritten institutional placement to complete the ramp-up of its Balama graphite project in Mozambique.
Under the offering, investors can subscribe for 42.2 million new shares at A$2.23 apiece, which represents a 9.3% discount to the stock's Sept. 3 closing price of A$2.46. The shares issued will represent about 12.4% of Syrah's undiluted share capital.
Aside from the ramp-up, the company intends to use the proceeds to advance its battery anode materials strategy to the end of 2019, fund the evaluation of the vanadium resource at Balama, and fund its corporate, general and administrative costs.
Eligible Syrah shareholders will also be given the right to take part in a share purchase plan at the same price following the placement. The share purchase plan will aim to raise about A$14 million, although the company may opt to raise a higher amount at its discretion.
The company expects to settle the offer on Sept. 7, while the share purchase plan would close on Oct. 2.
Balama is on track to meet its full-year production guidance of between 135,000 and 145,000 tonnes. Commercial production is expected to be declared during the fourth quarter, and the project would be operating cash flow positive from late 2018.